Edmund Phelps
Edmund Phelps: A Pioneer in Macroeconomics
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Full Name and Common Aliases
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Edmund Strother Phelps is a renowned American economist, known for his contributions to the field of macroeconomics.
Birth and Death Dates
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Born on October 26, 1933, in Evanston, Illinois. He is still alive as of this writing.
Nationality and Profession(s)
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Phelps is an American citizen, and his profession is that of a macroeconomic theorist, academic, and Nobel laureate.
Early Life and Background
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Edmund Phelps was born to a family of modest means in Evanston, Illinois. His father, James Strother Phelps, was a Presbyterian minister, while his mother, Alice (née Clark) Phelps, was a homemaker. Growing up, Phelps demonstrated an aptitude for mathematics and economics, which would later become the foundation of his career.
Phelps attended Harvard University, where he earned his Bachelor's degree in 1955. He then proceeded to Yale University for his Master's and Ph.D. degrees in Economics, graduating in 1961. His academic pursuits laid the groundwork for a distinguished career in economics.
Major Accomplishments
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Throughout his illustrious career, Phelps has made significant contributions to various areas of macroeconomics. Some of his notable accomplishments include:
Nobel Prize in Economics: In 2006, he was awarded the Nobel Memorial Prize in Economic Sciences for his work on the concept of " Phelps, A Theory of Second-Best Nationals", which introduced a new approach to economic policy analysis.
Phelps' Law: He is credited with formulating the idea that an economy's potential output is determined by its labor productivity and the state of technology. This theory has had a lasting impact on macroeconomic research.
The Phelps Curve: This concept, developed in collaboration with others, describes how inflation expectations can lead to higher unemployment.Notable Works or Actions
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Phelps' work has been instrumental in shaping modern macroeconomic thought. Some of his notable contributions include:
Economic Theory and Policy: He has written extensively on topics such as inflation, employment, and economic growth.
The Concept of Potential Output: Phelps has played a key role in developing the idea that an economy's potential output is determined by its labor productivity and technology.
Inflation and Unemployment: His work has helped economists better understand the relationship between these two macroeconomic variables.
Impact and Legacy
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Edmund Phelps' contributions to macroeconomics have had a lasting impact on our understanding of economic phenomena. His work continues to influence policymakers, researchers, and students around the world.
Phelps' legacy extends beyond his theoretical contributions. He has inspired generations of economists, including notable figures such as Paul Krugman and Joseph Stiglitz.
Why They Are Widely Quoted or Remembered
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Edmund Phelps is widely quoted and remembered for several reasons:
Innovative Ideas: His work on the concept of potential output and the relationship between inflation and unemployment has been groundbreaking.
Impact on Economic Policy: Phelps' ideas have influenced economic policy debates worldwide, making him a respected voice in the field.
* Inspiring Future Generations: As a role model for aspiring economists, Phelps continues to inspire new generations with his contributions to macroeconomic thought.
Quotes by Edmund Phelps
The main cause of Europe's deep fall - the losses of inclusion, job satisfaction and wage growth - is the devastating slowdown of productivity that began in the late 1990s and struck large swaths of the continent. It holds down the growth of wages rates, and it depresses employment.
The level of dynamism is a matter of how fertile the country is in coming up with innovative ideas having prospects of profitability, how adept it is at identifying and nourishing the ideas with the best prospects, and how prepared it is in evaluating and trying out the new products and methods that are launched onto the market.
America's peak years of indigenous innovation ran from the 1820s to the 1960s. There were a few financial panics and two depressions, to be sure. But in this period, a frenzy of creative activity, economic competition and rapid growth in national income provided widening economic inclusion, rising wages for all, and engaging careers for most.
A modern economy is marked by the feasibility of endogenous change: Modernization brings myriad arrangements from expanded property rights to company law and financial institutions.
The good life, as it is popularly conceived, typically involves acquiring mastery in one's work, thus gaining for oneself better terms - or means to rewards, whether material, like wealth, or nonmaterial - an experience we may call 'prospering.'
The difficulties of many European countries derive from their corporatism: state projects serving cronies and vast social protection programmes, both run by elites. These surged in the 1970s and 1980s.
The epic story of the West is the development in the 19th century of a mass prosperity the world had never seen and its near-disappearance in one nation after another in the 20th.
The Keynesian belief that 'demand' is always at the root of underemployment and slow growth is a fallacy.
I attended Amherst College from 1951 to 1955. The first two years were a revelation. There were innumerable exchanges with brilliant classmates, among them the playwright Ralph Allen, the classics scholar Robert Fagles, and the composer Michael Sahl.
If every effect of any new products or methods were required to be known before they could be produced and marketed, they would not be true innovations - and thus not represent new knowledge of what people would like, if offered.